Read the untranslated law here: https://www.bopa.ad/bopa/023005/Pagines/6AB92.aspx
Law 95/2010, of 29 December, on the tax on companies since the General Council in its session of December 29, 2010 has approved the following: law 95/2010, of 29 December, on the tax on companies reason and justification of the creation of the tax on companies for the purposes of the income tax act that is presented is to regulate and implement this tax figure. This link and fits in perfectly with the orientation of the Principality of Andorra in our days as a center of international services. The opening towards the outside of the Andorran economy along with the modernization of the tax system and a more equitable distribution of tax burdens are the main reasons underlying this legislative initiative.
The introduction of this tax as well as the subsequent conclusion of agreements for the Elimination of international double taxation are two elements of a binomial that is key in the shaping of the economic infrastructure of the Principality of Andorra, to the extent that will allow their citizens and entrepreneurs can compete in adequate conditions in the current stage of economic globalization. At the same time, the dual income tax/agreements for the Elimination of double taxation aims to erect on the axis on which turn the attraction of foreign investment to the Principality.
Only the introduction of a tax on companies approved in other countries will allow the Principality of Andorra signed agreements to eliminate double taxation treaties with other States, as an instrument of tax policy and compliance with defined standards internationally and, in particular, in the context of the Organization of economic co-operation and development (OECD), but also as a means to facilitate the departure abroad of their companies and the attraction of foreign investment in the territory of the Principality. In this same sense, the income tax is the complement of the commercial and financial reforms that have been undertaken lately with the aim to align the legal system of the Principality with the more advanced countries.
On the other hand, the introduction of a direct tax on the benefits clearly aligns with the constitutional principle of equitable distribution of tax burdens. At the same time, the implementation of the tax figures in force in the Member States of the European Union involves the removal of taxes and other tax figures that seem to make sense with the modernisation of the tax system; Thus, this Act derogates from the law on the register of holders of economic activities, the 20th of December, 1995.
II guiding principles of income tax at the time of setting up the tax on companies, have taken into consideration a series of principles that inspire the regulation, namely: the principles of coordination and international compatibility, transparency and simplicity regulations and competitiveness.
The principles of coordination and international compatibility have been taken into consideration for the purpose of modeling the tax in accordance with the prevalent trends and tax models in force in the Member States of the European Union and in the Member countries of the OECD, without disavowing the guidelines followed by other countries. In this sense, it can be said that the tax on companies regulated in this law is Orthodox, perfectly compatible and is on par with what is required in the main countries of Europe and the OECD. At the same time, and still you have searched the surrounding countries recognise in the income tax of the Principality of Andorra a figure analogous to that which they have in their legal systems, has tried to articulate a rule of the most advanced, providing our companies operating instruments and solutions that you will find only the most developed States, such as, for example , previous agreements in the area of transfer pricing in line with the driven by the guidelines of the OECD and by the European Forum of transfer prices.
At the same time to articulate the rules of the income tax, it has tried to bring to the last consequences the principle of transparency, which requires that the tax rules are clear and intelligible, so that their application may be made with the maximum legal certainty for taxpayers. It has been intentionally fleeing the solutions especially complex can be found in many legal systems, in order to allow the legal entities of the Principality of Andorra to apply a tax that does not cause problems due to their complexity rules.
The principle of competitiveness is one of the cornerstones of the model of income tax. This means choosing the most suitable option to the reality and the Andorran economic context among the tax options offered by European countries and the OECD. Needless to say, the competitiveness of the Andorran tax does not contradict in any way the international compatibility of this tribute, since the tax take as a model the ones who have allowed various States of the European Union and of the OECD a bigger economic growth on the basis of not overloading their businesses with high tax rates.
III fundamental aspects of the income tax the income tax has synthetic character, so subject to encumbrance of a unitary all income obtained by legal persons tax resident in Andorran territory that carry out an economic activity. The synthetic nature of the tax simplifies the application on the part of taxpayers and allows for adaptation of this tribute with the principle of neutrality.
The tax world-wide income subject to taxation provided by taxpayers, that is to say, to legal persons, so that companies that have not adopted corporate form are out of the scope of application of that tax. Only qualified entities as a tax resident in the Principality of Andorra are subject to the tax on companies.
On the basis of taxation has opted for a model according to which this tax base is calculated based on the outcome accountant, but entering at the same time certain tax adjustments or corrections extracomptables. This model of "partial compliance" with the accounting result is used in a number of countries of the European environment and has as its main advantages the simplicity, consistency and harmonization between the largest commercial accounts and the tax tax base.
The tax also contains some of the main antiabús clauses established on an international scale, as for example the rule of assessment of operations between related persons. Also here it has adopted the principle of full competition produced by the OECD following the guidelines of the OECD transfer pricing and multinational companies, which must be used for the purposes of interpretation.
The regulation of the mechanisms for the Elimination of international double taxation economic and is inspired by European models are more developed, in line with the principle of international compatibility that inspires the tax. It has also been incorporated here provisions to avoid the abusive use of these mechanisms of elimination of double taxation.
Formally the law is divided into 66 articles, two additional provisions transitional provisions, repeal a four and seven final provisions.
Chapter i. nature and scope of application of the tax Article 1 Nature 1. The income tax is a direct and personal nature of tribute videos of legal persons in accordance with the rules of this law.
2. The exacció of the tax corresponding to the taxable non-tax residents in Andorran territory is carried out in accordance with the law that regulates the income tax of non-tax residents.
Article 2 scope of spatial application the income tax is applied to all the territory of the Principality of Andorra.
Article 3 Treaties and agreements the provisions of this Law shall be understood without prejudice to the provisions of treaties and international agreements that have become part of the internal legal system.
Chapter II. The fact is the generator generator generator Article 4 actually Made the obtaining of income, whatever its source or origin, for part of the tax obligation, irrespective of the place where it occurred and whatever the tax residence of the payer.
Article 5 Presumption of income The transfers of goods and rights in the various modalities will boast paid for its normal value market, except in reverse.
Chapter III. The taxable taxable Article 6 1. Are taxable in the tax, when they have their residence in the territory of Andorra: a) legal persons.
b) collective investment institutions included in the scope of application of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law.
c public and parapublic Institutions and public law).
2. the taxable of this tax will describe concisely and indifferently to the denominations "societies" or "entities" in the course of this law.
3. The income corresponding to the civil societies, inheritance jacents, communities of goods and all those entities or autonomous assets regulated in the second paragraph of the letter a) of section A) of article 15 of the law on the bases of the Tax Ordinance, from 19 December 1996, is allocated to its members, heirs, commoners or unitholders in accordance with the regulations or agreements applicable in each case or in equal parts in the absence of these , joined in the tax when these are legal persons.
Article 7 Residence tax and tax address 1. Are considered to be tax-resident in the territory of Andorra the entities on which will give some of the following requirements: a) which have been constituted in accordance with the laws of the Principality of Andorra.
b) which have their registered office in the Principality of Andorra.
c) with its effective management in the territory of the Principality of Andorra. To this end, it is understood that an entity has its effective management in the territory of the Principality when there is radiquin or you exercise the general management and control of the production of the whole of its business or activities.
d) who have transferred their residence in the Principality of Andorra, from the first social exercise that ends later in the transfer.
2. The fiscal domicile of the taxable tax-resident in the territory of the Principality of Andorra is derived from the application of the rules to the effect that article 23 of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 8 Exemptions 1. Are fully exempt from the tax: a) the General Council.
b) the Government.
c) Are common.
2. Are partially exempt from the tax: a) The non-profit foundations.
b) non-profit associations are regulated by the law of associations, of 29 December 2000.
c) the Catholic Church and other confessions.
d) Are professional bodies.
e) federations with non-profit purposes.
f) non-profit purposes confederations.
g) joints with non-profit purposes.
h) trade unions.
and political parties).
k) schools, vocational schools and institutes of public character.
the) public universities.
m) Other non-profit cultural institutions or social.
n) Social Security and mutual societies for accidents at work and occupational diseases.
o) the quarterfinals.
3. In relation to the entities referred to in paragraph 2, are only exempt from this tax the following income: a) which come from the completion of activities that constitute its corporate purpose or the specific purpose, in accordance with the specific legislation.
b) arising from acquisitions and transfers to profit, as long as the one and the other are carried out in accordance with its purpose or its specific purpose, in accordance with its own legislation.
c) which are set out in the onerous transfer of property used in the performance of the object or the specific purpose when the total of the product retrieved from it being channelled into new investments related to this specific object or purpose.
The new investments must be made within the period between the year prior to the date of delivery, or of the availability of the property element and the three following years, and shall be kept in the heritage of the company for four years, although its useful life in accordance with the method of depreciation that article 10 is less than.
In the event that the investment is not made within the period indicated, the share of tax corresponding to the income obtained is integrated, in addition to the interests of delay, together with the fee corresponding to the tax period in which he beat the deadline and to carry out the investment. The transmission of these elements before the end of the period mentioned determines the integration in the basis of taxation of the income not recorded, unless the amount obtained is the subject of a new reinvestment.
4. The exemption that regulate the sections 2 and 3 is less than returns to financial holdings, or the income from the assets, or the income obtained in transmissions, other than those expressly point out that the mentioned sections. However, the taxable referred to in paragraph 2 are fully exempt from tax for this tax when their income resulting from such activities not covered by the exemption provisions of this precept to be inferior to 10,000 euros per year.
Chapter IV. The basis of taxation Article 9 concept and determination of the basis of taxation 1. The tax base consists of the total amount of income in the tax period.
2. The basis of taxation is determined by the direct method of determining the objective determination system in the cases provided for in this law and, moreover, by the indirect method of determining, in accordance with the provisions, in the latter case, article 29 of the law on the bases of the Tax Ordinance, from 19 December 1996.
3. in the direct method of determining the basis of taxation is calculated by correcting the accounting result, determined in accordance with the provisions of law 30/2007, of December 20, the accounting for entrepreneurs and the general accounting plan, with the implementation of the provisions established in chapter IV of this law.
4. The direct estimation of the tax base allows a simplified method that is applied on a voluntary basis when the net amount of the annual turnover of the business activities carried out by the tax obligation the period immediately preceding tax is less than the amount predicted by the simplified regime of the accounting of the additional provision law 30/2007, of December 20, , of the accounting for entrepreneurs and is established in article 14.
Article 10 value Corrections: depreciation 1. Are tax deductible amounts which, in concept of amortisation of the intangible, tangible and real estate investments, corresponding to the effective depreciation that have the various elements for the functioning, use, enjoyment or obsolescence.
It is considered that the depreciation is effective when it is the result of applying the coefficients of linear amortisation that are derived from the table in the Annex I.
2. the purchase price Is deductible from the corresponding intangible goodwill, with the maximum annual limit of the fifth part of the amount, provided that the following requirements are met: a) that has been shown by virtue of acquisition charges.
b) the purchaser entity does not have a relationship of Association, under the terms defined in article 16, with the person or entity transmitent.
c) that has been equipped with a backup available, at least to the amount deductible fiscally, in the terms established by the accounting legislation. If you can not make this book the best, the deduction is conditioned to the fact that this book will be promoted at the expense of the first benefits of the following exercises.
3. When will comply with the requirements provided in the letters) and b) of the previous paragraph, will be tax deductible, with the maximum annual limit of the fifth part of its amount, the allocations for the depreciation of intangibles with indefinite useful lives. This deduction is not subject to the accounting charge in the profit and loss account.
4. In cases in which the accounting value of the assets or rights subject to repayment of the tax value artwork differs, the latter is relevant for all purposes of this Act. By "fiscal value" means the value of acquisition of the asset or right decreased in the amount of the depreciation deducted for tax purposes and, if necessary, to value corrections made, taking into account the valuation rules provided for in article 15.
Article 11 value Corrections: losses due to deterioration of the value of heritage elements 1. Are tax deductible fiscally losses for deterioration of value that provides accounting standards with the conditions set out, where applicable, in the following points of this article.
2. The losses due to deterioration of credits arising from the possible insolvency of the debtors, when at the time of the accrual of the tax will give any of the following circumstances: a) has passed the period of six months from the expiration of the obligation.
b) That the debtor be declared in State of suspension of payments or bankruptcy.
c) That the debtor is prosecuted for the crime of lifting goods.
d) That the obligations have been legally claimed or to be the subject of a legal dispute of the solution of which depends on the charge.
The losses in respect of the credits that are mentioned below are only tax deductible if they are the subject of a judicial procedure that version on their existence or amount:-those who owe the entities of public law or are fiançats to these entities.
-The fiançats to credit institutions.
-Are guaranteed by real rights, domain booking Pact and right of retention, except in cases of loss or depreciation of the warranty.
-Are guaranteed by a contract of insurance or surety bond.
-Those who have been the subject of express extension or renewal.
They are not tax deductible losses for the coverage of the risk arising from the possible insolvency of individuals or entities associated with the creditor on terms that article 16, except in the case of legally declared insolvency.
3. Are tax deductible losses for deterioration of values of the participation of entities that do not make contributions on a regulated market that is produced by the difference between the value of shareholders ' equity at the beginning and the end of the year, and should take into account the contributions or refunds of contributions that they make. To determine the difference referred to in the previous paragraph, will take the values at the end of the year, as long as they pick up on the balance sheets formulated or approved by the competent body.
In the case of representative values of the participation in the capital of entities who make contributions to a regulated market, the deduction for losses due to deterioration will be counted by the difference in the value of trading on the beginning and the end of the financial year, in accordance with the provisions of accounting standards.
4. Are tax deductible losses for impaired debt securities representative admitted to trading on regulated markets, with the limit of the global loss, computerised variations of positive and negative value, sustained in the tax period by all these values possessed by the tax forced admitted to trading on these markets.
Article 12 Provisions 1. Provisions for liabilities provisions or specific accounting standards of the sector are fiscally deductible. However, they are not tax deductible the following expenses: a) those relating to remuneration in the long term to the personnel, except that in the case of contributions for staff remuneration under the terms provided in the accounting regulations. However, are tax deductible contributions from promoters of social systems, provided they meet the following requirements:-they are charged specifically to people who are linked to performance.
-Which is transmitted for irrevocable right to the perception of the future benefits.
-That is outsourced in the sense that it will transmit the ownership and the management of resources in what cehipar these contributions.
b) concerning the costs of compliance with contracts that exceed the economic benefits that they expect to receive.
c) those resulting from corporate restructuring, but if you refer to legal or contractual obligations and not merely left unspoken.
d) those relating to the risk of sales returns.
e) The staffing to correspond with payments based on instruments of heritage, used as a formula of compensation to employees, whether it satisfies in cash or by delivery of these instruments.
2. Expenses, in accordance with the previous section, you do not have been fiscally deductible are included in the basis of taxation of the tax period in which the provision will be applied to your order.
3. The expenses inherent to the risks arising from guarantees of repair and revision are tax deductible up to the amount necessary to determine a balance of allowance of no more than the result of applying to sales with live coverage at the conclusion of the tax period the percentage determined by the ratio between the expenses made to deal with the guarantees arising from the tax period and the previous two in relation to the sales with guarantees made in the same tax periods.
Non-deductible Expenses article 13 1. Are not deductible from the base of taxation the following items: a) which represent a remuneration of net worth. Are equivalent to these payments made to participants not in the management contracts of accounts in participation.
b) derived from the compatibility of the tax on companies. Nor have the consideration of income from this posting.
c) the quotas of taxation which, in his case, the tax must have been paid to the communal tax on income from tenants, to the communal tax of moment of commercial activities, business and professional, and the tax on capital gains on the transfer of real estate.
of criminal and administrative sanctions and fines), and the enforcement Providence that regulates the letter c) of paragraph 3 of article 33 of the law on the bases of the Tax Ordinance, from 19 December 1996.
e) the loss of the game.
f) donations and the liberalitats. Don't understand this paragraph included in the expenses for public relations with customers or suppliers or those which, in accordance with the uses and customs, is made with respect to the personnel of the company or those carried out to promote, directly or indirectly, the sale of goods and the provision of services, or that they are correlated with income. In any case, these fiscally deductible expenses may not exceed 1% of the positive tax base average of the year and the two previous years. In any case, it is not considered donations or liberalitats, those made to entities without spirit of profit that are registered in the official register.
g) however the foreseen in the letter f), donations made by taxable entities recognized as non-profit organizations are tax deductible for the determination of the tax base up to a maximum of 10% of the accounting result.
2. The remuneration to directors and administrators linked specifically to the performance of these charges, only are tax deductible to the extent that compensin travel and attendance at meetings of the company or of the Board of Directors, within the limits established by the regulations. This restriction does not affect wages and salaries or benefits for services paid to administrators or the directors tax residents in the Principality of Andorra to the extent that these are included in the system of Social security of the Principality or, in the case of administrators or non-tax resident directors, if the payments are subject to the tax on income of non-tax residents.
Article 14 determination of the basis of taxation under the simplified determination of the basis of taxation under the simplified method is carried out in accordance with the model provided in Annex II.
The Government will establish regulations the conditions, timelines and other formal aspects relating to the determination of the tax base in the simplified mode.
Article 15 Rules of assessment 1. The assets are valued at purchase price or production cost, determined in accordance with the rules established in the general accounting plan.
In accordance with the provisions of article 56, the amount of accounting adjustments made has not been integrated in the base of taxation, except when they are carried out in accordance with legal or regulatory rules obliging to include the amount in the profit and loss account. The amount of the revaluation is not integrated in the base of taxation does not determine a higher value, for tax purposes, of the elements revalorats.
2. Are valued for their normal value market heritage elements as well: a) Are transmitted or acquired in profit.
b) Are provided to entities and the value received in consideration.
c) Are transmitted to the partners due to dissolution, separation of these partners, reduction of capital with repayment of contributions, premium delivery and distribution of benefits.
d) Are transmitted under merger, absorption and total or partial excision.
e) Are acquired by barter.
f) obtained by Exchange or conversion.
Is meant by "normal value market" what has been agreed under normal conditions between independent parties in identical or similar transactions or legal business.
3. In the cases provided in the letters a), b), c) and d) of the preceding paragraph, the transmitting entity integrates in its base of taxation the difference between the normal value of market of the elements transmitted and its value to tax or accounting purposes, if this value is different from that one.
In the cases provided in the letters e) and f) of the preceding paragraph, the entities included in the basis of taxation the difference between the normal value of the market of the items purchased and the accounting value of tax or delivered.
In acquisition to profit, the acquiring entity integrated into their tax base the normal value of the market equity item purchased.
The integration on the basis of taxation of the incomes referred to in this article must be made in the tax period in which they perform the operations of which derived from those incomes.
For the purposes of the provisions of this section, are not understood as ' acquisitions in the lucrative title "grants.
4. in the reduction of capital with repayment of contributions is integrated into the base of taxation of the entities that are members or part of normal market value of the excess items received on the accounting value tax or participation.
The same rule applies in the case of distribution of the issue of shares or bonus shares.
5. In the distribution of benefits has been to integrate in the basis of taxation of the entities that are part of the normal market value partners or items received.
6. On the dissolution of entities and separation of the entities that are members or a part is integrated into the base of taxation of these partners or again the difference between the normal value of the market for items received and the value of the cancelled participation tax or accounting.
7. in the merger, absorption or total or partial excision is integrated into the base of taxation of the partners legal persons the difference between the normal value of the market of participation received and the value of the cancelled participation tax or accounting.
8. capital reduction, the purpose of which is different from the return of contributions does not determine for entities that are members or participants income, positive or negative, that can be in the basis of taxation.
Article 16 related-party operations 1. It is considered that there are binding when the same persons or entities participating directly or indirectly in the management, control or capital of two entities. In any case, are considered to be "persons or entities linked to" the following: a) an entity and its members or participants.
b) an entity and its directors or administrators of fact or of law.
c) an entity and the spouses or persons linked by relations of kinship, in direct line by consanguinity or collateral to the third grade of the partners or participants, counselors or administrators.
of) an entity and another entity in which the first indirectly at least 25 per cent of the share capital or net worth.
e) two entities that belong to a group.
f) two entities in which the same participants or partners or their spouses, or people linked by kinship relations, online direct or collateral by blood up to the third grade, participate, directly or indirectly, at least 25 percent of the share capital or net worth.
g) a tax resident in the territory of Andorra and its permanent establishments abroad.
h) non-tax resident Andorran territory entity and its permanent establishments in the area mentioned.
2. In cases where linking is set according to the relationship "partners or participants-entity", the participation must be greater than or equal to 15 per cent, or 3 per cent in the case of securities admitted to trading on a secondary market.
Likewise, there are group, for the purposes of this article, when a company owns, directly or indirectly, control of another or others. In particular, it is assumed that there is control when a society, that will qualify as a dominant, you are in a relationship with another company, which will qualify as a dependant, when you own a majority of the voting rights.
3. Transactions between persons or entities are valued for their normal value market. Normal value is understood to be the market that should become independent persons or entities under conditions of free competition.
4. The Ministry in charge of finance can verify that transactions between persons or entities linked are rated by their normal value and market practice, in your case, the appropriate axes corrections in respect of the operations subject to this tax, the income tax of economic activities and the income tax of non-tax residents. The Ministry in charge of finance is bound by the new value with respect to other persons or entities involved.
Administrative assessment cannot be generated by this tax or, in your case, to the tax on income of economic activities or for the income tax of non-tax residents of an income higher than the actually arising from the operation to the whole of the people or entities that have been made.
5. To determine the normal value of the market apply any of the following methods: a) Method of free price comparable, which compares the price of the good or service in an operation between persons or entities linked to the price of a good or service identical or similar features in an operation between independent persons or entities in comparable situations.
b) method of the cost increase, which adds to the value of acquisition or cost of production of the goods or services identical or similar in margin transactions with persons or entities independent of or, failing that, the margin that persons or entities independent of applied to comparable transactions.
c) resale price method, by which sostrau of the selling price of a good or service the margin that applies the reseller in identical or similar transactions with persons or entities independent of or, failing that, the margin that persons or entities independent of applied to comparable transactions.
6. taxable to perform swaps can request the Ministry responsible for finance their attendance for the purpose of determining and fixing of the normal value of the market of their operations related to prior to their implementation. This request must be accompanied by a proposal of assessment based on the market value with a description of the facts and circumstances of the operations in question and a description of the proposed method.
The Ministry in charge of finance may establish agreements pre-assessment tax administrations with other countries within the framework of double taxation agreements, for the purpose of determining the normal value of jointly market the tax forced operations.
The agreement of valuation at what comes between the required tax and the Ministry in charge of Finance has effects in respect of transactions carried out subsequent to the date on which it is approved, and be valid for tax periods that are funded in the agreement. Furthermore, in the agreement it is possible to establish that its effects reach the operations of the tax period in progress, as well as to the operations carried out in previous tax periods, as long as they have not been the subject of regulation by the Ministry responsible for finance.
In the case of significant variation of the existing economic circumstances at the time of the approval of the agreement between the Ministry responsible for finance and the tax required, the agreement mentioned should be amended by common agreement to adapt it to the new economic circumstances or, in the event that they do not reach an agreement, it must be cancelled. The information provided in the framework of this procedure may not be used for purposes other than those provided in this section to part of the Ministry in charge of finance.
The regulations are to develop the principles set out in relation to the previous agreements of assessment, particularly the rules relating to the submission of proposals and preliminary contacts, the articulation of the agreements, the verification of its correct application, extension, modification, cancellation and revocation of these agreements.
The Ministry responsible for finance must notify the applicant of its decision to tax must accept or reject the startup or the application of the procedure established by this precept within a period not exceeding six months from the date on which the application has been in any of the records of the Ministry in charge of finances or from the date of the amendment at the request of the Ministry. If this period elapses without having produced a resolution expresses, the application, when you have been accompanied by a reasoned proposal of evaluation, it is understood was estimated.
7. Without prejudice to the established in the previous sections, the financial expenses incurred by entities resident for tax operations carried out, directly or indirectly, by persons tax resident non-resident persons or entities linked or related tax deductible expenses are considered not fiscally, but if the required financing is proof that this tax has agreed on terms comparable to those of the market between independent parties.
Article 17 rules of valuation: changes of residence, asset transfer to permanent establishments located abroad, operations carried out with or to persons or entities tax resident in territories with a taxation substantially lower than that of the Principality of Andorra and quantities subject to withholding 1. Is integrated into the base of taxation the difference between the normal value and the market value accounting or tax, as appropriate, of the following assets: a) that are owned by a company tax resident in the territory of the Principality of Andorra who moved his residence out of the country, except if these assets are affected in a permanent establishment situated in the territory of the Principality of the entity said. In this case, the original property tax value the items that are in the headquarters of the entity that transfers his residence abroad.
b) that are owned by a company tax resident in the territory of the Principality of Andorra that moved its effective management out of the Principality and, in accordance with an international treaty, it can be considered to be tax resident in the other Contracting State, but if these assets are affected at a permanent establishment of the aforementioned entity located in the territory of the Principality of Andorra. In the latter case, the heritage preserved the original fiscal value they have in the headquarters of the entity that transfers its effective management abroad.
c) in the cases provided in the letters a) and b), where the company that moved its residence or its effective management out of the Principality of Andorra have purchased Andorran fiscal previously to move from a State different from the Principality of Andorra, income that must be integrated in the basis of taxation is the difference between the market value of the assets which form part of the fixed assets of the company at the time the tax residence in the Principality of Andorra and its value at the time in which it occurs the circumstance that describe letters a) and b).
The same rule applies in relation to the transfer of assets after the acquisition of the tax residence in the Principality of Andorra to entities who have transferred their residence in the Principality.
Both in one case as in the other, the depreciation and the corrections to the axes effect of this tax, are made, when appropriate, on the market value of the property element at the time of acquisition of the residence in Andorra. This value is presumed to be the indicated in the first accounting prepared in accordance with the rules of the Principality of Andorra and presented for the purpose of the transfer of the residence or the seat of effective management in the Principality of Andorra. In the case of the depreciation, taking into account the useful life, determined in accordance with the laws of the Principality of Andorra, the patrimonial element since its commissioning on the part of the company.
The test of the market value in these situations correspond to the entity in which the circumstances provided in letters a) and b) or that conveys the property element.
d) Are transmitted to a permanent establishment located abroad when this item has previously been to the House in the middle of a company tax resident in the Principality of Andorra. When, prior to the transfer, the item property has been transferred to the Principality of Andorra from abroad, income that must be integrated in the basis of taxation is the difference between the market value of the asset or right at the time of her commissioning in the Principality of Andorra, descomptades the appropriate depreciation, and the market value at the time of transmission.
In the case of transfers of assets that form part of the fixed assets of the company tax resident in the Principality of Andorra since the parent company located in the Principality to the permanent establishment situated abroad, the integration of the income in the tax base can differ to the point at which the item property is transferred to a third party not connected with the previous presentation of the appropriate guarantees to the Ministry responsible for finance. The company tax resident has to report every year to the memory of the annual accounts the affectation of the heritage elements in the permanent establishment located abroad until the time at which the item property is transferred to a third party not linked. In the latter case, the tax obligation is not entitled to apply the methods of elimination of double taxation treaties that regulate article 21 or article 43 to the income generated during the period of time in which the good or right was to tax the activities required in the Principality of Andorra with prior to its transfer to the permanent establishment located abroad.
It is considered, to this effect, an Andorran entity operates through a permanent establishment abroad when, in accordance with the laws of that country or territory, it is considered that there is this permanent establishment and this definition is similar to the definition of this concept in the income tax of non-tax residents.
2. The operations made with persons or entities resident in countries or territories to apply a lower tax on 50 percent that would have been applying the tax on companies in the Principality of Andorra are valued for their normal value market.
3. Not included in the basis of taxation the incomes that are put out on the occasion of the payment of tax debts in the way that article 36 of the law 9/2003, of 12 June, of the cultural heritage of the Principality of Andorra.
Article 18 effects of the replacement of the accounting value for the normal value of the market When a property item or service have been valued for tax purposes by the normal value of the market, in accordance with the rules established in articles 15 to 17, the acquirer of that property item or service integrates in their tax base, with negative or positive sign as appropriate, the difference between this value and the value of the acquisition, as follows: a) If this is their heritage members of the current assets in the tax period in which these heritage encourage the accrual of an income.
b) If this is their heritage elements not redeemable tangible fixed assets, intangible or members of property investment, in the tax period in which these assets are transferred. If it is capitalized tangible fixed assets the members of heritage, intangible or real estate investments, in tax periods that remain of life, applying to the difference mentioned the method of depreciation used in respect of the items mentioned above.
c) in the case of services, in the tax period in which they are received, except if the amount is deemed to be incorporated in a patrimonial element, in which case you need to stick to that established in the previous letters.
Article 19 temporary Allocation. Registration of accounting income and expenses 1. Revenue and expenses are allocated to the period in which the tax accrues, in accordance with the rules established in the general accounting plan, taking into account the current real goods and services that those income and expenditure account, regardless of the time at which the monetary or financial flow occurs, respecting the appropriate correlation between the one and the other.
2. Are not fiscally deductible expenses for bookkeeping purposes have not been charged in the profit and loss account or to an account of reservations if you set a legal rule or regulations, except in cases where this law expressly allows for incentives or expenses with tax effects that are not reflected for bookkeeping purposes, without prejudice to the need to mention the specific incentive in the memory of the institution.
The income and the expenses charged to the profit and loss account for bookkeeping purposes or in an account of reservations in a tax period different from that in which appropriate their temporary allocation, in accordance with the established in the previous sections, it is allocated in the relevant tax period in accordance with the provisions of the above paragraphs. However, in the case of eligible expenses for bookkeeping purposes in these accounts in a tax period subsequent to that in which appropriate their imputation of income imputed a temporary or in the profit and loss account on a previous tax period, the temporary allocation of a and the other is made in the tax period in which the accounting has been charging as long as they do not result in a lower taxation which would have corresponded to application of the rules of temporary allocation provided in the previous sections.
3. In the case of operations in instalments or with deferred price, rents are understood obtained proportionally as made corresponding charges, unless the entity decides to apply the criterion of the accrual basis.
Considered or in operations with deferred price sales and foreclosures work the price of which will register, totally or partially, by means of successive payments or a single payment, provided that the period elapsed between the delivery and the expiration of the last or only one term is more than a year.
In case of the endorsement, the discount or the anticipated payment of the deferred amounts, is understood to have obtained, at that time, the pending charge.
The provisions of this section apply regardless of how you have counted the income and expenses in the income affected.
4. Expenses for provisions and internal funds for the coverage of contingencies in the field of social work as a pension plan, for the coverage of the contingencies of retirement, death or disability, are attributable in the tax period in which they obtained by performance. The same rule applies in respect of contributions to the coverage of contingencies analogous to that of pension plans that do not have been deductible.
At the same time, the costs of personnel cleared off the delivery of heritage instruments referred to in the letter e) of paragraph 1 of article 12 are tax deductible in the tax period in which they deliver these instruments.
5. The recovery of value of assets that have been the subject of a correction of value is to be charged in the tax period in which this recovery has occurred, either in the company that performed the correction or another that is linked. The same rule applies in the case of losses resulting from the transmission of heritage items of tangible assets intangible and tangible, real estate investments that have been newly acquired within six months following the date on which they were transmitted or losses derived from assets that have been transmitted in a society linked.
The tax value resulting from the application of these rules is that all the effects have to be taken into account in the income tax, corresponding to the entity that made the adjustment on the accounting value of the item property.
The rules relating to the recovery of value will apply both in relation to assets acquired before the entry into force of this rule as to assets acquired subsequent to that date.
6. In any case, the income arising from the acquisition of heritage elements in profit, both in cash and in kind, exchange losses are in the tax period in which the income produced, without prejudice to the provisions of the last paragraph of section 3 of article 15.
7. When you removed provisions, because they have not been applied to its purpose, without payment to an account of the income of the financial year, the amount is included in the basis of taxation of the entity that has provided, in the extent to which this provision has been considered a deductible expense.
Article 20 elimination of internal and international economic double taxation on investments in benefits of other entities through the method of exemption 1. Dividends and shares in profits from non-tax resident or entities resident in Andorra, as well as the income from the transfer of a participation or from the dissolution of an entity owned or of separation as a partner, are completely exempt from taxation, provided that the following requirements are met: a) the entity in which non-tax resident is subject, with no possibility of exemption , to a tax similar to the income tax of the Principality of Andorra under the terms provided in paragraph 3 of article 43.
If the entity which directly is not subject to a similar tax, but it is the subsidiary owned by this, the requirement is understood to have met with regard to the income from the entity not subject that, in turn, come from the subsidiary second graders that meets the requirement of subject to a similar tax.
In the case of entities tax residents in the Principality of Andorra, this exemption applies if the entity which is subject and not exempt from this tax.
In the case of shares in benefits, the application of this requirement is referring to the tax period in which they obtain the benefits that can be found or in which it participates, while in relation to the income from the transfer of the participation or liquidation of the company, is required in compliance with the requirement in all periods of tenure of the participation.
b) that the percentage of participation, direct or indirect, in the capital, the equity, equity or voting rights of the entity resident or non-resident tax is greater than or equal to 5 per cent.
The corresponding participation must possess uninterrupted during the year prior to the day on which it is required the benefit that is distributed or, if there are, they should be kept later in the time required to complete this period. In the case of income arising from the transfer of the participation, the period of one year will be counted until the time of transmission of the participation or liquidation of the company. For the calculation of the term mentioned, it has to take into account the period in which the participation has been continuously possessed by people related in the sense of article 16.
2. In relation to the shares referred to in the previous section, the following limitations apply: a) in the case of investments in entities resident or non-resident tax, the costs linked to investments that generate non-exempt income are tax deductible.
b) When the tax obligation he had practiced some fiscally deductible value correction on shares transferred, the exemption is limited to the excess of income obtained in the transmission on the amount of the correction.
c) are not tax deductible value corrections caused by the profit distributions made by the participating organizations.
3. Proof that the circumstances to apply the exemptions established in this article is provided in the tax obligation that invoke the right to apply it.
Elimination of international double taxation on the profits attributable to permanent establishments located abroad 1. Are exempt from the income obtained abroad through a permanent establishment situated outside the territory of the Principality of Andorra when this permanent establishment has been subject to imposition by a burden of features similar to this tax.
2. When in previous tax periods, the permanent establishment have negative income, net that have been integrated in the basis of taxation of the entity, the exemption provided in this article only applies to the positive incomes obtained later from the moment in which exceed the amount of these negative incomes.
If the permanent establishment is transformed into a subsidiary and they integrate negative income obtained by the first on the base of taxation of the entity tax resident in the Principality of Andorra, the paragraph 1 of article 20 is not applied by the Andorran entity until the amount of the profits distributed or the proceeds of the transfer of the participation exceeds the negative income, net from the previous permanent establishment and integrated in the basis of taxation of that subsidiary entity. At the same time, the losses of the permanent establishment transformed into subsidiary and forming part of the basis of taxation and who have not been compensated with positive income included in the basis of taxation of the entity tax resident in the Principality of Andorra generates a positive adjustment in the year if any of the following circumstances: a) the shares or shares of the company that formerly was a permanent establishment are transmitted to related entities or other permanent establishments located abroad.
b) the main activity generating income of the subsidiary and that led to the integration of losses on the basis of the company tax resident in the Principality of Andorra when it was a permanent establishment is transmitted to an entity linked.
3. To this effect, it is considered that an entity operates through a permanent establishment abroad when, in accordance with the laws of that territory, it considers that this permanent establishment exists and this definition is similar to the definition of this concept in the law that regulates the tax on income of non-tax residents.
Article 22 compensation of negative tax bases The negative tax bases can offset the positive tax base of tax periods that have been completed in the ten years later.
Chapter v. Special schemes of determination of the basis of taxation Article 23 special scheme for companies that carry out international exploitation of intangible assets or take part in international trade 1. Are taxable can benefit from a reduction of 80 percent of the tax base corresponding to the income resulting from the concessions or authorisations of use, transfers or licenses of rights, transfer of assets, property or rights, or rendering of services listed below: a) of any concession or authorization of use or assignment or license of rights on patents, designs, models and industrial designs , trademarks, domain names and other distinctive signs of the company, as well as other industrial property rights.
b) any concession or authorization of use or assignment or license of rights on plans, formulas or secret procedures, of rights to information concerning industrial, commercial or scientific experience, including the techniques and methods of business, marketing or the concession of use of industrial, commercial or scientific equipment.
c) any concession or authorization of use or transfer or license of copyright on literary, artistic or scientific works, including audiovisual productions and programs, applications and computer systems, as well as related rights the copyright of the author. The activity of exploiting image rights can only benefit from the application of this regime as developed by entities whose main activity of which is the professional management of the image rights of individuals not linked, within the meaning of paragraph 4 of article 16, and the activity will develop with the appropriate material resources and personal to carry it out.
d) transmission of property and rights which relate the lyrics to), b) and c) above.
e) for this purpose, is calculated in the provision of services that will benefit from the reduction of this article the activity of international sale of goods and comissionista, agent or middleman in general in international sales of goods, and any other type of property, including real estate, located outside Andorran territory. Is meant by "international sale of goods" which refers to goods or products that are outside the territory of the Principality of Andorra, and have not been sent out of this territory in order to benefit from this regime, and alienin in favor of non-tax resident in the Principality of Andorra to the use for the purposes of his business or act as final consumers.
2. The application of the reduction in the basis of taxation provisions of the previous section is subject to the fulfilment of the following conditions: a) in cases relating to intangible assets that mentions the letter a) of paragraph 1, the tax obligation has to exploit the assets in question on their own behalf within the framework of his economic activity.
b) That the tax must have in Andorran territory to carry out the activities mentioned in paragraph (1) a person hired at least half a day and a minimum surface area exclusively of 20 m 2.
c) That the assignee of the rights of use or the borrower of the services use these rights or benefits in the development of any type of economic activity and that the results of this use will not materialize in the delivery of goods or the provision of services by the assignee that generate expenses deductible fiscally in the transferor company or service provider, as long as, in the latter case , this entity is linked with the assignee or the borrower.
d) That the assignee of the right or the borrower of the services is not an entity or natural person tax resident in the Principality of Andorra and the right or service is not used directly in the Principality. Nor does it apply to this scheme when the right loan or the service provided is in fact linked with the activity carried out by a person or entity non-tax resident who operates in Andorra through a permanent establishment.
3. The application of this regime must be requested by the tax to the Ministry in charge of finances forced through a letter in which they identify the sectors of activity to which it will apply and will support the competition of the conditions established in the previous sections. The Ministry in charge of finance, in accordance with the procedure established by regulations, approve or deny this request. The resolution put an end to licensing procedure for the application of this regime should report in a period not exceeding six months from the date on which the application has been in any of the records of the Ministry in charge of finances or from the date of amendment of this request at the request of the Ministry responsible for finance. If this period elapses without an express resolution has occurred, the request can be understood is rejected. The system produces effects from the same tax period in which it was presented in the application form.
Once granted the initial authorization, the tax must be applied later in tax periods that apply must communicate this fact to the competent body of the Ministry in charge of finance, where there is a substantive change in the circumstances in relation to the provisions of the initial authorization. This communication must contain an identification of the sectors of activity in which that scheme will be applied and the justification of the concurrence of the conditions for the application of this regime. The Ministry responsible for finance must authorize the application of the special scheme to the new activities in accordance with a procedure identical to that regulates the previous paragraph.
The initial authorization, as well as the subsequent extension of the scheme to other sectors, which could grant the Ministry in charge of Finance shall be understood without prejudice to the administrative check of the concurrence of the requirements for the application of this regime.
Article 24 special scheme for management and financial investment societies intragroup 1. Management societies and financial investment that regulates this precept enjoy a reduction of 80 per cent of the basis of taxation. For the purposes of this precept, it is understood by "management and financial investment companies" tax resident companies in the Principality of Andorra, the activity of which consists of obtaining loans from related entities or third parties that, together with its social capital, are used in the making of loans to related entities non-tax residents in the sense defined by article 16. Likewise, financial and investment management companies can perform the following activities: a) management and investment of the Treasury or their related entities non-tax residents.
b) factoring services, leasing and management of collections and payments with other involved organizations non-tax residents.
c) coverage of the risk of exchange rate of the group.
d) Emissions of bonds, preferred shares and other instruments that serve to attract resources for the group in the international capital markets, with the prior authorization of the governing body of the Principality of Andorra.
e) functions complementary to the above and linked to the financial strategy of the corporate group as, for example, the preparation of the budgets of the various non-tax resident companies in the Principality of Andorra and the group, the financial management of the corporate group, the development of global programmes of investment, the investment group's profitability studies or market research.
2. financial management and investment companies may not perform any other type of activity different from those which apply the special scheme or distinct from the activity of a company of foreign participations tenure to which is applied the scheme of article 20.
3. The management company and financial investment must have a minimum share capital of 250,000 euros and in Andorran territory to carry out their activities of a person hired at least half a day and a minimum surface area exclusively of 20 m 2. The granting of the special scheme of management company and financial investment is subject to the submission of the corresponding application to the Ministry in charge of finance, which, in view of the specific circumstances of the corporate group and with the prior determination, if you love fit, of the conditions which must comply with the management company and financial investment in order to guarantee their solvency , you can accept or deny the application of this regime with effect from the moment of submission of the request. The procedure for the application of this special scheme is determined by the regulations.
Article 25 definition of tax group 1. The taxable that particular form of public limited companies or limited Andorra and forming part of a tax group, can pay for under the provisions in this article.
2. Are part of a tax group all those societies that participate in other companies, whether directly or indirectly, to a degree greater than or equal to 75 percent of its share capital or of the voting rights. The tax group is formed by both the dominant and the dependent entities, provided that all are taxable to that tax. This participation must be maintained continuously during the entire tax period. The indirect participation will be the result of multiplying the percentages of participation.
3. Cannot form part of a tax group: a) The exempt entities to which refers article 8.
b) entities that at the end of the tax period are in a situation of suspension of payments or bankruptcy, or your net worth is negative.
c) The subsidiary companies of which participation is achieved through another company that does not comply with the requirements established by a member of the tax group.
4. The tax group is terminated when the parent lose the character mentioned.
5. indirect participation will be the result of multiplying the percentages of participation.
Article 26 application of the tax consolidation regime 1. The regime of fiscal consolidation is applied when you agree to do so each and every one of the companies that need to integrate the tax group and also consolidate your accounts accountants.
2. the agreements referred to in the above paragraph must adopt the shareholders ' meeting or the equivalent in any tax period date immediately prior to the applicable is the regime of fiscal consolidation.
3. The societies that are integrated into the tax group must meet the obligations refer to the previous sections, within a period that ends on the day on which the conclusion of the first tax period in which they have to pay in the tax consolidation regime.
4. The lack of agreements which refer to sections 1 and 2 determines the impossibility of applying the regime of fiscal consolidation.
5. Exercised the option, the tax group is linked to this scheme indefinitely for the following tax periods, while it will not meet the exclusion reasons regulated in the previous article and while it will not renounce its application through the relevant procedure determined by regulations, which must be exercised, if necessary, within a period of three months from the end of the last tax period of its application.
6. The parent must notify the agreements mentioned in paragraph 1 to the Ministry in charge of Finance before the beginning of the tax period in which it is applicable this regime and subsequent variations in the composition of the group.
Article 27 determination of the tax base of tax group 1. The Group's tax taxation base determined in accordance with the regulation that establishes the rules for the formulation of consolidated annual accounts, taking into account the international accounting standards foreseen in law 30/2007, of December 20, the accounting for entrepreneurs.
2. the basis of negative taxation of any society to compensate for at the time of its integration into the Group tax can be offset in the basis of taxation of this.
Article 28 Required tax law 1. The tax group is a compulsory tax.
2. The parent has the representation of the tax group and is subject to the fulfillment of tax obligations the formal and material derived from this regime of fiscal consolidation.
3. The parent company and the subsidiary companies are also subject to tax obligations that derived from individual taxation scheme, with the exception of the payment of the tax debt.
4. Administrative actions or research carried out before the check parent or to any entity of the Group tax, with the knowledge of the dominant society, disrupt the period of prescription of the income tax that affects the tax group mentioned.
Article 29 Tax Period The tax period of all the societies of the group must match that of the parent company.
Article 30 tax share of tax group is meant to tax share of tax group the amount resulting from applying to the tax base of tax group, determined in accordance with article 27, the general type of burden.
Article 31 Deductions and rebates of the tax share of tax group 1. The Group's tax tax fee will be reduced accordingly in the amount of deductions provided in Chapter VIII.
The requirements for the application of the above-mentioned deductions relate to the tax group.
2. Deductions of any society pending application at the time of its inclusion in the tax group can be deducted in the tax share of tax group with the limit you've corresponded to the society mentioned in the single scheme of taxation.
Article 32 The payment on account of tax group 1. The Group's tax account payments are calculated by applying the general type of burden on the basis of appropriate taxation of the tax group.
2. The obligation to make the payment on account of tax group is the responsibility of the parent.
Article 33 tax Responsibilities arising from the application of the tax consolidation regime The societies of the group the tax debt, excluding the ones responsible respond tax penalties.
Article 34 information Obligation 1. The parent company should formulate, for tax purposes, the balance sheet and the consolidated profit and loss account, with the application of the method of global integration in all societies that make up the tax group.
2. the consolidated annual accounts refer to the same date and time that the annual accounts of the parent company, so that the subsidiary must shut down your exercise at the date on which you make the parent.
3. The documents referred to in paragraph 1, attached the following information: a) The eliminations made in previous tax periods pending incorporation.
b) deletions made in the tax period in duly justified its source and amount.
c) The additions made in the tax period, equally justified in its source and amount.
d) differences, properly explained, that may exist among the deletions and additions made for the purpose of determining the tax base of tax group and carried out for the purposes of the preparation of the documents referred to in paragraph 1.
Article 35 Causes determining the loss of the tax consolidation regime 1. The regime of fiscal consolidation will be lost for the following reasons: a) the audience in one or more of the companies members of the tax group in any of the circumstances, in accordance with what is established in the law on the bases of the Tax Ordinance, from 19 December 1996, determine the application of the method of indirect estimation.
b) the breach of the obligation of information referred to in the previous article.
2. The loss of the tax consolidation regime is produced with the effects of the tax period in which they give one or more of the causes referred to in the previous section, so that the members of the group have tax payable by the individual scheme in the period mentioned.
Article 36 the effects of the loss of the tax consolidation regime and of the termination of the tax group
1. In the event that there is, in the tax period in which there is the loss of the tax consolidation regime or the termination of the tax group, pending deletions of incorporation, tax group's tax deductions or negative bases on the outstanding share of compensation, it is necessary to proceed as follows: a) The pending deletions of incorporation must be integrated into the Group's tax tax base corresponding to the last tax period in which the tax consolidation regime is applicable.
b) societies that make up the tax group in the tax period in which the loss occurs or the termination of this regime must assume the right to the compensation of the negative taxation tax group to compensate, in the proportion who have contributed to its formation.
The compensation is done with the positive tax bases to be determined in individual regime of taxation.
c) societies that make up the tax group in the tax period in which the loss occurs or the termination of this regime must assume the right to compensation pending the Group's tax fee deductions, in the proportion in which they have contributed to its formation.
2. Societies that make up the tax group in the tax period in which the loss occurs or the termination of this regime must assume the right to deduction of payments that you have made the tax group, in the proportion in which they have contributed to these payments.
3. The provisions of the previous sections is applicable when one or more of the companies that make up the tax group there are no longer belong.
Article 37 Group's tax declaration and payment 1. The parent company is obliged, at the time of presenting the Group's tax statement, to liquidate the tax debt corresponding to this and enter it on the site, the shape and the deadlines determined by the Ministry in charge of finance.
The parent company has to meet the same obligations in respect of payments on account.
2. The Group's tax declaration must be submitted within the period corresponding to the statement in the diet of individual taxation of the parent company.
3. supplementary declarations that have been practicing in the event of termination of the tax group, loss of the diet of fiscal consolidation or separation of Group companies tax, must be present within the twenty-five calendar days to six months after the day on which were the determining causes of extinction, loss or separation.
Article 38 Special Regime of holding companies of securities 1. For the purposes of this special regime, it is understood by holding companies of securities companies the object of which understand the activity of management and administration of representative values of equity. Possession of society values must have a minimum share capital of 120,000 euros.
The securities or the shares of participation in the capital of the holding entity of foreign values must be non-negotiable.
2. dividends or shares in the profits of non-resident entities in Andorra, as well as the income from the transfer of the corresponding participation, can enjoy the exemption to avoid international economic double taxation provided that they meet the following requirements: a) the percentage of participation, direct or indirect, in the capital or in the equity of the non-resident entity is , at least, of three percent. The corresponding participation must possess uninterrupted during the year prior to the day on which it is required the benefit that is distributed or, if there are, they should be kept later in the time required to complete the term mentioned.
b) that the entity which has been recorded by a foreign tax nature identical or analogous to this tax, according to the provisions of article 43, in the year in which they are retrieved from the benefits that can be found or in which it participates.
3. distributed benefits charged to the exempt income referred to in the previous section are following treatment) When the recipient is a non-resident entity or physical person, the benefit distributed do not understand retrieved from in Andorra.
b) When the recipient is a resident company or a permanent establishment, the benefit distributed will be exempt from taxation.
4. The income obtained in the transmission of the participation in a foreign stock ownership society receive the following treatment) When the recipient is a non-resident entity or physical person is not understood to have obtained in Andorra rent corresponding to the reserves with a charge to the income exempt referred to in paragraph 2.
b) When the recipient is an entity subject to this tax or a permanent establishment situated in Andorra the income corresponding to the reserves with a charge to the income exempt referred to paragraph (2) will be exempt.
5. The granting of the special scheme for holding foreign securities company is subject to the submission of the corresponding application to the Ministry in charge of finance. The procedure for the application of this special scheme is determined by the regulations.
The company should identify in the memory of your annual accounts details of the portfolio you own, identifying the shares in the companies that have or have had in the exercise, the heritage value and dividends or would you like to register in the exercise.
Chapter VI. Tax period and accrual Tax Period Article 39 1. The tax period coincides with the economic performance of the entity.
2. In any case, the tax period has concluded: in) When the entity is terminated.
b) when you have a change of residence of the entity tax resident in the territory of Andorra abroad.
c) when the transformation of the legal form of the entity and that determine the non-subject to this tax on the resulting entity. For the purpose of determining the taxable base corresponding to this tax period, it is understood that the entity has been dissolved with the effects provided for in paragraph 3 of article 15.
d) when the transformation of the legal form of the entity, and this determines the modification of your tax rate.
3. The tax period does not exceed 12 months.
Article 40 Accrual of the tax the tax is payable on the last day of the tax period.
Chapter VII. Tax rate and share of taxation Article 41 tax rate
1. The general type of burden for taxable of this tax is 10 percent.
2. The tax rate applicable to collective investment institutions regulated by law 10/2008, of 12 June, regulating collective investment bodies of Andorran law, in exclusion of the management companies, which are subject to the general scheme, it is 0 percent.
Article 42 Payment of taxation is meant by "tax payment" the amount resulting from applying the base of taxation, determined in accordance with the previous articles, the tax rate.
Chapter VIII. Settlement fee and deduction to eliminate internal and international double taxation Article 43 settlement Payment and deduction to eliminate internal and international double taxation 1. The settlement is the result of subtracting the tax fee deduction for internal and international double taxation regulated by this article.
2. The payment of taxation is reduced accordingly to the amount of the tax fees met by the tax obligation to the communal tax on income from tenants, to the communal tax on the moment of commercial activities, business and professional, and the tax on capital gains on the transfer of real estate corresponding to incomes that have been integrated into the tax base of this tax.
3. When in the basis of taxation of the income tax law required integrated and recorded abroad, is deducted from the payment of tax the least of the two following amounts: a) the cash amount paid abroad for reasons of burden of similar characteristics to this tax that has to be subject to taxation the tax required.
For the purpose of establishing this substantial similarity, will take into account the essential characteristics of the foreign tax, as well as if the main purpose of this tax lies in the imposition of the income obtained by the tax obligation.
Not be deducted taxes not paid by virtue of exemption, allowance or any other fiscal incentive granted abroad, unless stated otherwise in an agreement to avoid double taxation that is applicable. It is considered that the foreign tax is similar to the income tax of the Principality of Andorra provided that it is covered by a double taxation agreement that is in force.
If you apply an agreement to avoid double taxation, the deduction may not exceed the tax that corresponds according to the agreement.
b) the amount of the share of taxation than in the Principality of Andorra would pay for the aforementioned income if they had obtained in Andorran territory.
For the purposes of the calculation of this amount, the tax base corresponding to the foreign income is determined in accordance with the rules of this tax, and are solely attributable to this basis of taxation expenses specifically connected with the generation of income mentioned.
4. The amount of the tax paid abroad is included in income for the purpose provided in the previous section, and also forms part of the basis of taxation, although is not fully deductible.
5. When the required income tax on the tax period has obtained several overseas, the deduction will be calculated jointly for all.
6. The amounts not deducted for lack of payment of tax may deduct the tax periods that subsequently have been completed.
For this purpose, the tax obligation to prove the origin and amount of deduction that intended, by the display of appropriate documentary, regardless of the period in which originated the right to deduction.
7. When the result of the application of the deduction provided in paragraph 3 leading to the application of the provisions of the letter b), the excess foreign taxes resulting from the difference between the amount resulting from applying this limit and that is derived from the provisions of the letter a) can be moved and deducted in the tax periods that have been completed to the effect of the calculation of the deduction , always with the limits of the letter b) of paragraph 3.
8. Without prejudice to the established in the previous sections of this article, when in previous tax periods tax rents NET has obtained the required negative through a permanent establishment abroad that have been integrated in the basis of taxation of the entity, the deduction referred to in paragraph 3 applies only with respect to the income later on by the permanent establishment mentioned from the moment in which it exceeds the amount of these negative incomes.
9. The provisions of this article may not be applied in relation to profits or gains arising from collective investment institutions referred to the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law or non-tax resident organizations of similar nature to those regulated by the aforementioned Law.
Article 44 treatment for new investments The depreciation corresponding to goods and rights for economic activity, acquired from the entry into force of this law are tax deductible according to some new coefficients of linear depreciation resulting from multiplying by 1.4 the reduction coefficients provided for in article 10.
Chapter IX. Payments on account Article 45 The payment on account 1. In the months of June and December are taxable payments should be made at the expense of the liquidation corresponding to the tax period that is in progress on the last day of the month indicated.
2. Payments on account are calculated by applying the percentage of 50% on the settlement of the immediately preceding financial year.
In the case that the previous period has a duration of less than 12 months, the payment on account will be made taking into account the proportional part of the settlement of previous periods to complete a period of twelve months.
3. The payment on account has the consideration of tax debt for the purposes of article 33 of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 46 deduction of payment on account and differential fee The payment on account is deducted from the settlement fee to get the differential fee. When, by the effect of the payment on account, the differential fee is negative, the Ministry in charge of finance, has to repay the excess.
Chapter x. Management and liquidation Article 47 tax Record
1. the taxable income tax must have a tax registration number (hereinafter NRT), which should be requested, in case you don't already possess as a taxable of indirect taxes. This number is unique for all State taxes. The request must be formalized by means of the standard form set by the Government.
2. The Ministry responsible for finance must carry a tax register in which to register the entities that are taxable to that tax.
3. The regulations are developed forms, deadlines and documents to present to the obtaining of NRT as well as the procedures for the management of the tax.
Article 48 provisional tax on the record Low 1. The Ministry responsible for finance must dictate, with the audience of the interested parties, agreements of temporary low in the following cases: a) When the bank debits related to this tax to the Ministry in charge of finances are bad for the tested insolvency declared tax obligation in the sense that article 44 of the law on the bases of the Tax Ordinance from 19 December 1996.
b) When, being-there are bound by this law, the Organization has not submitted the corresponding tax during two consecutive tax periods.
2. The agreement does not relieve the Organization of temporary low affected of any tax obligations that may incumbir in accordance with this law.
Article 49 of the provisional Record low by bankruptcy 1. When the bank debits related to this tax to the Ministry in charge of finance have been declared proven insolvency of the tax liable for bad in the sense that article 44 of the law on the bases of the Tax Ordinance, from 19 December 1996, the Ministry in charge of finances has to start a temporary low tax register of the income tax , in which they announce the opening to the affected entity with the warning that if it does not satisfy their tax debts unpaid within the period of thirty days, will cause temporary drops in the mentioned.
2. Once after two months from the date of notification of the communication referred to in the preceding paragraph, the Ministry in charge of finance, if necessary, must declare with provisional low tax register.
3. For the purposes of giving publicity to this low with temporary character of the tax Record, will the corresponding publication in the official bulletin of the Principality of Andorra.
Article 50 provisional low record for lack of submission of claims 1. When is it required by this law, an entity has not submitted the corresponding tax during two consecutive exercises, the Ministry responsible for finance must require the forced the submission of tax declarations included in the period of one month, and warn you that, if it does not, it will be because of low tax registry.
2. If is the deadline established in the preceding paragraph without that have presented statements claimed, ex-officio will be applied low tax registration, without prejudice to the testing and research that are considered appropriate.
3. For the purposes of giving publicity to this low with temporary character of the tax Record, will the corresponding publication in the official bulletin of the Principality of Andorra.
Article 51 notification to public records of the provisional low 1. Once agreed the temporary low of an entity in accordance with the provisions of this law, the Ministry responsible for finance must notify the Companies Registry by commandment, in which should be inserted verbatim the resolution date, the relapse, or corporate name of the company and its tax address.
2. Once we have received the notification, the registration of commercial companies should extend in the open to the entity a marginal note, which must state that, if during its validity is presented a document for their registration, this registration cannot be made until you give the circumstances referred to in the following article.
Article 52 of the marginal note Cancellation the cancellation of the marginal note inscribed in the register of Companies requires the prior agreement of the Ministry in charge of finance that has prepared the practice, adopted ex officio or at the request of the association concerned, once that this entity has proved to be up to date in meeting their tax obligations in relation to this tax.
Article 53 Duty of collaboration with The notaries have to submit electronically to the Ministry in charge of the finances of the institutions related to the Constitution, the establishment, modification or extinction of which have authorized during the quarter immediately preceding natural.
Article 54 the accounting Obligations. Powers of the Ministry in charge of finance 1. Are taxable in this tax must bring its accounting in accordance with the provisions of law 30/2007, of December 20, the accounting for entrepreneurs or with that established the rules by which they govern.
2. The Ministry in charge of finance may perform the check and search through the examination of the accounts, books, correspondence, documentation and evidence concerning the business tax and accounting programs, including the required files and magnetic media. The Ministry in charge of finance can analyze directly the documentation and the other elements referred to in the preceding paragraph, and may take note by means of its agents of accounting notes that are considered to be necessary and obtain a copy at their expense, even on magnetic supports, of any of the information or documents referred to in this section.
3. The dominant companies of groups of companies article 34 of law 30/2007, of December 20, the accounting for employers are obliged, at the request of the Ministry in charge of finance formulated in the course of the procedure of verification, to provide the profit and loss account and the balance sheet of the entities belonging to the group who are not tax resident in the territory of the Principality of Andorra. Should also facilitate the receipts and other records relating to this accounting documentation when you can have significance in relation to this tax.
Article 55 property and rights not accounted for or not declared: presumption of obtaining of income
1. Is presumed to have been acquired by non-income declared the heritage the ownership of which corresponds to the required tax and are not recorded in the accounting books.
The presumption also applies in the case of partial concealment of the value of the acquisition.
2. It is assumed that the heritage registered not in accounting are the property of the tax obligation when this exercises possession.
3. It is assumed that the amount of the undeclared income is the value of acquisition of the goods or rights not recorded in accounting books, minorat in the amount of effective debt contracted to finance this acquisition, likewise not accounted for. In any case, the net amount cannot be negative.
The amount of the value of the acquisition is tested through the supporting documents of the acquisition or, if not possible, it is estimated that the value of the acquisition coincides with the real value or market goods or right in the exercise which is attributable income in accordance with the provisions of paragraph 5.
4. It is assumed the existence of income not declared non-existent debts have been recorded in the accounting books of the tax obligation.
5. the amount of the income due to the presumptions contained in the previous sections it imputes to the oldest tax period from non-prescribed, unless the tax must try that corresponds to another or others.
6. The value of the assets referred to in paragraph 1, when it has been incorporated into the base of taxation, is valid for all tax purposes.
Article 56 The accounting adjustments made voluntary accounting adjustments made the amount of which has not been included in the tax base of this tax will not have tax effects. The tax must be mentioned in the report has the amount of these revaluations, the items affected and the period or the tax periods in which they practice. These mentions should be made in each and every one of the memories pertaining to exercises in which the revalorats elements are in the heritage of the tax obligation.
Assimilated to this type of the revaluations carried out between the time of admission for processing and publication in the official bulletin of the General Council of the Bill of the income tax and the entry into force and application for the compulsory law tax, when the transmission of the right or right has been enhanced within a period of five years from the entry into force of the law.
In the case of property acquired prior to the application of the obligation of depositing annual accounts in the register of Companies, does not support any revaluation of the value of acquisition that, for all purposes of this Act, is consigned in the public deed of purchase of the property.
Article 57 Statements 1. Are taxable must submit and sign a statement to this tax in place, the time and manner specified by the regulations.
2. the taxable referred to paragraph 2 of article 8 have to declare all of their income, exempt and non-exempt.
Article 58 of the income tax debt and Payment 1. Are taxable, at the time of its Declaration, must determine the tax debt and enter it on the site and in the manner specified by the regulations.
2. The payment of the tax debt can be made through the delivery of assets of cultural heritage of the Principality of Andorra in the way that article 36 of the law 9/2003, of 12 June, of the cultural heritage of Andorra.
3. the right to enjoy exemptions, deductions or any tax incentive in the tax base or tax fee is subject to the fulfilment of the requirements required by the applicable regulations.
Unless specifically stated otherwise, when later in the application of the exemption, deduction or the tax incentive is the loss of the right to enjoy this incentive, the tax must have to enter along with the payment of the tax period in which takes place the non-compliance of the requirements or conditions the payment of taxation or the amount deducted for the exemption, deduction or the incentive applied in previous periods In addition to the interests that are required in accordance with the law of the Tax Ordinance, from 19 December 1996.
Article 59 provisional Liquidation by the Ministry in charge of finance may turn the temporary settlement appropriate in accordance with articles 54 and 55 of the law on the bases of the Tax Ordinance, from 19 December 1996, without prejudice to subsequent checks you can carry out the organs of this Ministry.
Article 60 a refund of trade 1. When, in accordance with article 46, the differential fee is negative, the Ministry in charge of finance, if necessary, must practice the temporary settlement within three months following the term of the deadline for the presentation of the claim.
When the statement has been submitted after the deadline, the three months referred to in the previous paragraph will be calculated from the date of its presentation.
2. When the differential fee resulting from the payment or, where appropriate, of the temporary settlement is negative, the Ministry responsible for finance must return to craft this fee, without prejudice to the practice of further settlements, final or provisional, which prosecuted.
3. If the tentative settlement has not been practiced within the period provided for in paragraph 1, the Ministry responsible for finance must return to craft the negative differential fee resulting from the payment, notwithstanding the practice of temporary or permanent settlements further that might be coming from.
4. If it takes place within the provisions of paragraph 1 without ever ordered the payment of a refund due to causes attributable to the Ministry in charge of finance, you should apply to the outstanding amount of the refund is the legal interest referred to in article 38 of the law on the bases of the Tax Ordinance, from 19 December 1996, from the day after the end of the period mentioned and up to the date of your payment , without the need for the tax claim forced it.
5. Regulations will determine the procedure and the method of payment for the completion of the return of trade referred to in this article.
Article 61 Faculties of the Ministry in charge of finance to determine the basis of taxation
For the purposes of determining the base of taxation, the Ministry responsible for finance must apply the rules set out in this law.
Chapter XI. Infractions and sanctions Article 62 Breaches the regulation infringements tax matter relating to the content of this law shall be governed by that which is not established in the present law, the regime of infractions and sanctions established in the third section of the chapter III of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 63 types of infringements 1. Are considered incomplete without information on infringements in The simple: importance of settlement).
b) failure to comply with the requirements of information and/or documentation.
c) the breach of the obligations to include information in the memory of the annual accounts.
2. Are considered to be offences of defrauding: a) the non-presentation of the payment.
b incomplete information on The importance of) with liquidation.
c) false information.
64 article Sanctions 1. The simple offences are sanctioned with a fixed fine of between 150 euros and 3,000 euros.
2. The offences of defrauding are sanctioned by a fine proportional to between 50% and 150% of the let down.
3. The above penalties are set following the graduation criteria established in the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 65 Notifications of infringements 1. Prior to the imposition of a penalty, must be notified to the person concerned the proposed resolution with indication of the facts charged, the precept infringed and the amount of the fine. The person concerned has a term of thirteen working days to raise everything they consider appropriate for their defense.
2. After the deadline of allegations, the competent body will issue the corresponding resolution, against which you can go in the terms established in article 72 of the law on the bases of the Tax Ordinance, from 19 December 1996.
3. In any case, and because the administrative act is in suspense, with the filing of the appeal must provide a sufficient guarantee, mortgage or a deposit or guarantee either of an Andorran Bank that guarantees the total amount of the tax debt.
Chapter XII. Order Court of competent jurisdiction Article 66 The administrative jurisdiction, with the prior exhaustion of administrative remedies in tax matters, it is the only competent to determine disputes of fact and law that arise between the Ministry in charge of finance and are taxable in relation to any of the matters referred to in this law.
First additional provision. Reduction for the first year of application of the law in the first year of application of the tax the taxable enjoy a reduction of 50% of the settlement fee.
Second additional provision. Tax benefits for the creation of small businesses during the first three years 1. For taxable of this tax will constitute as new entrepreneurs a new business or professional activity and having an income of less than 100,000 euros, the tax rate applicable during the first 3 years of activity is: a) the 5% for the portion of the tax base between 0 and 50,000 euros.
b) The 10% for the remaining tax base.
2. This fiscal bonus will not be applied to taxable who carry out or have carried out any type of activity, both directly and through a company.
3. The regulations will determine the forms, deadlines and documents required to be eligible for these tax benefits.
First transitional provision. Losses generated before the entry into force of this law When prior to the entry into force of this law an entity has experienced a negative accounting result, from accounting exercises initiated after 1 January 2010, determined according to the general accounting plan and paragraph 3 of article 9, these losses can be offset with positive tax bases obtained later in the terms envisaged in article 22.
Second transitional provision. Value of tangible fixed assets, intangible or real estate investments in operation prior to this tax items of tangible fixed assets, intangible or real estate investments in operation on the date of effective implementation of this law (including the goodwill or indefinite life intangible assets) can only amortize itself, in accordance with the method that supports the paragraph 1 of article 10, on the basis of the value that they have on this date for bookkeeping purposes, unless these items are already fully recovered at that time.
This value is obtained by subtracting the value of acquiring the linear depreciation that corresponds to the years between the commissioning of the element and the date of production of the effects of this law. In relation to these elements, corresponds to the taxpayer the burden to prove reliably date of acquisition or commissioning of these items, the price or cost of acquisition of the property element as well as the depreciation and the corrections made axes for bookkeeping purposes prior to the effective date of application of this law; the lack of proof of these aspects determines the impossibility to amortize these items after the effective application of the law. In the case of goodwill or indefinite life intangible assets, the provision of the depreciation, limited to exercises following the entry into force of this law, is subject to the test on the part of the tax required to be given to the requirements that defines this precept in the year in which it is acquired.
Third transitional provision. The basis of taxation during the first year of application of the tax if the tax period does not coincide with the calendar year, the first tax period corresponding to the tax base is calculated in accordance with the provisions of this law, but weighing to the proportion between the months elapsed during 2012 on the total number of months of your tax year.
Fourth transitional provision. Payment on account during the first year of application of the tax
During the first year of application of the tax, only required the payment on account of the month of June in the article 45. This is calculated by applying the tax rate foreseen in article 41, on the basis of 75% of the net profit of the previous year accounting to the tax period, determined according to the rules provided in law 30/2007, of December 20, the accounting for entrepreneurs.
Repealing provision. Rate on the register of holders of economic activity law derogates from the rate on the register of holders of economic activities, the 20th of December, 1995.
First final provision. Modification of the law on the bases of tax legislation the Government should be presented within a period of one year from the entry into force of this law, a draft law amending the law on the bases of the Tax Ordinance, from 19 December 1996, that adapt and update the procedures of settlement, management and control of taxes in relation to the requirements and needs of this law.
Second final provision. Tax on real estate capital gains 1. Paragraph 1 of article 6 of the law 21/2006, of 14 December, on the tax on capital gains and real estate conveyance is worded as follows: "1. For the purposes of this tax, are taxable individuals and entities not subject to the income tax or the tax on the income from economic activities or the income tax of non-tax residents that transmit the real estate property or property rights on the same goods. ".
2. Paragraph 1 of article 8 of the law 21/2006, of 14 December, on the tax on capital gains and real estate conveyance is worded as follows: "1. The basis of taxation is made up of the positive difference between the real value of the property conveyed or of law which constitutes or gives, and the value of the acquisition. On this positive difference is a reduction of 20%. ".
3. Paragraph 5 of article 8 of the law 21/2006, of 14 December, on the tax on capital gains and real estate conveyance is without content.
4. article 9 of the law 21/2006, of 14 December, on the tax on capital gains and real estate conveyance is worded as follows: "establishing a single tax rate of 10%.".
Third final provision. Law of creation of the Chamber of Commerce, industry and services the first section point a) of article 14, Act of creation of the Chamber of Commerce, industry and services of Andorra, of 3 September 1993 is drafted as follows: a) the fees that must be paid every year the electors of the Chamber, in the amount resulting from applying the amount specified in the General Budget Law on income tax and the tax on income from economic activities. The incurrence of the fee will be established in the same law of the General budget. The rules of prescription are applicable in the legislation on the public finances of the State. All the electors that, during the whole or part of a tax year have registered his name one or more commercial, industrial or service activities in the electoral register of the Chamber of Commerce are required to pay the fee.
The fourth final provision. Update of the General Budget Law amounts can update the tax rate or the quantitative limits established by this law, without which it can not imply substantial modifications of the tax that it regulates.
Fifth final provision. Enabling regulations 1. It entrusts to the Government the drafting of provisions and regulations needed for the development and implementation of this law within a period of six months from its entry into force.
2. The Declaration of this tax and those of their payments on account are set by regulation, which should be set up, in addition to the form, the site and the deadlines for submitting them, the cases and conditions of your presentation by telematic means.
3. Is delegated to the Ministry in charge of finances for the management and collection of the tax is regulated by this law.
4. During the first six months of application of the tax, the taxable can make queries relating exclusively to the interpretation of the articles of the law that have to be answered by the Ministry in charge of finance and that will be binding. The Government will establish regulations the terms and the scope in which you will be able to carry out these consultations.
A sixth final provision. Application of the Tax Law is applicable to the tax periods that are started from the first day of the financial year immediately following publication in the official bulletin of the Principality of Andorra of a law of the value added tax to replace the indirect goods tax, the tax on business and professional services, the sales tax on domestic production , and the sales tax on commercial activities, and for the income accrued from that date.
7th final provision. Entry into force this law enters into force the day after being published in the official bulletin of the Principality of Andorra.
Casa de la Vall, 29 December 2010 Josep Dallerès Codina, General Syndic Us the co-princes the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.
Nicolas Sarkozy Joan Enric Vives Sicília and President of the French Republic and the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra Annex and The coefficients of linear depreciation are obtained on the basis of the following depreciation periods: item to amortize amortization Period (years) buildings and other buildings between 30 and 40 technical installations between 8 and 12 Machinery between 6 and 8 Tooling and other facilities Between 3 and 5 Furniture between 4 and 6 computer Between 2 and 5 items of transport between 5 and 8 Annex II Download the document
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